Can we drop the charade that Apple's iPad isn't hurting PC sales?


Another day. Another technology CEO noting that the Apple iPad is stealing some sales away from the netbook and notebook market.
This go round it’s AMD CEO Dirk Meyer’s comments that are garnering a good bit of attention. After AMD’s third quarter results Thursday, Meyer said:
The last quarter or two the tablet represented a disruption in the notebook market. If you ask five people in the industry you’ll get five different answers as to what degree there’s been cannibalization by tablets of either netbooks or notebooks. I personally think the answer is both. Given the pretty high price points of the iPad, there’s probably some cannibalization even of mainstream notebooks. We still believe in the long term that tablet form factor is accretive to the market opportunity for companies like AMD.
The upshot is that AMD plans a tablet chip at some point, but is waiting for the market to develop more.
However, Meyer’s contention that you can get a bunch of different opinions about the iPad’s impact on the netbook and notebook market is hogwash. Increasingly, tech execs are acknowledging the hit to PC sales.
To wit:
Will they impact PC sales? Sure, at the margin they probably will. Consumers will have a limited amount of discretionary income and some will choose to purchase a tablet instead of upgrading an existing PC or purchasing a netbook in any given period.
Otellini then spent most Intel’s conference call talking about tablet plans.
  • Micron Technology CEO Steve Appleton said that the iPad is hampering netbook and notebook demand. There is some substitution effect.
  • Best Buy CEO Brian Dunn acknowledged that the iPad hurt netbook salesonly to backtrack after PC makers beat him over the head.
  • In IDC’s recap of the PC market share race, analyst Bob O’Donnell said “Apple’s influence on the PC market continues to grow, particularly in the U.S., as the company’s iPad has had some negative impact on the mininotebook market.”
Now everyone that acknowledges that the iPad is hurting notebook sales hedges just a bit and falls back on the theory that the total addressable market will increase. The reality is the consumer’s total addressable cash flow isn’t increasing. It only makes sense that the iPad is crimping PC sales. It’s not like consumers have thousands of dollars sloshing around to blow on computing devices.
The fact that iPad is a PC market disruptor makes Meyer’s cautious stance toward tablets a bit strange. Meyer said:
Our overall strategy with respect to tablets is to first observe that that’s a form factor that we think is going to grow over time and be important over time, as I said, and be accretive and one which we’ll devote specific R&D energy towards when the market is big enough to justify that investment.
Frankly, we’re still so small in the notebook market that given all of the opportunities in front of us it doesn’t make sense for us to start turning R&D dollar spending towards the tablet market yet. We’ll start doing that when the market is big enough and then you can anticipate we’ll show up with a differentiated offering with great graphics and video technology and so on.
But if AMD really wants to rise up and punch No. 1 Intel in the mouth it needs to move fast on tablets.